India is expected to be the fastest growing economy in Asia and will reverse two years of declining growth to clock 7.3 per cent rise in GDP in the current fiscal and further accelerate to 7.6 per cent in FY20, the Asian Development Bank said in its forecast for the region.
The dip in growth to 6.6 per cent in FY17 was in part due to the lingering effects of demonetisation that impacted the informal sector in the first half of FY17 and teething issues related to implementation of the goods and services tax (GST), the ADB said in the latest Asian Development Outlook (ADO) 2018 report. It expects various reforms measures to lift growth.
According to India’s official estimates, the economy picked up pace to 7.2 per cent in October-December 2017 quarter from 6.5 per cent in July-September quarter and 5.7 per cent in April-June quarter. For the entire FY18, the economy is expected to grow 6.6 per cent .
The Reserve Bank of India expects 7.4 per cent growth in FY19.
“Despite the short-term costs, the benefits of reform—such as the recently implemented GST—will propel India’s future growth,” said Yasuyuki Sawada, ADB’s chief economist, in a statement.
“Robust foreign direct investment flows attracted by liberalized regulations and the government’s steps to improve the ease of doing business will further bolster growth.” China is forecast to slow down from 6.9 per cent in 2017 to 6.6 per cent this year and further 6.4 per cent in 2019.
"India would remain the fastestgrowing country across Asia," ADB India country director Kenichi Yokoyama said but flagged rising NPAs and crude prices spiking to over $70 a barrel as risks.
India’s growth will get support from measures to bolster farmers’ purchasing power through higher procurement prices, agriculture market reforms and investments in irrigation and logistics, the Manilabased bank said. “Investment revival is expected to continue, albeit at a modest rate, as firms and banks strive to improve their balance sheets, and capacity utilization levels pick up,” it said in a statement.
Inflation is forecast to rise to 4.6 per cent in FY18 and 5 per cent in FY19 due to firmer global commodity prices and stronger domestic demand. “The uptick in inflation along with deferment of fiscal consolidation and expected hikes in the US Federal Reserve’s interest rate has reduced the room for policy rate cuts to stimulate growth,” it said.
A pick-up in growth in advanced economies will likely help exports grow at a healthy rate, but the ADB added that though protectionist trade measures by the United States are yet to impact trade, they pose a risk. "However, further action and retaliation against it (US trade tariffs) could undermine the business and consumer optimism that underlies the regional outlook (for Asia)," it said.
US tariff hikes may not impact India much but there is a "need to be cautious," Yokoyama said.
Source:- The Economic Times
India has emerged as the top recipient of foreign direct investment (FDI) from within the Commonwealth and is the second-most lucrative source of investment within the 53-member organisation after the UK, according to a new trade review.
The trade review released in the lead up to the Commonwealth Heads of Government Meeting (CHOGM) next week.
'Commonwealth Trade Review 2018: Strengthening the Commonwealth Advantage', compiled by the Commonwealth Secretariat, also found that India has moved into the top five providers of intra-Commonwealth services trade, surpassing Canada, and alongside Australia, Singapore and the UK.
"Between 2005 and 2016, India remained the top recipient of greenfield FDI from the Commonwealth, more than doubling the amount it received over 10 years...India is the leading country for attracting greenfield FDI, not only from the Commonwealth but also from the world. In 2015, it overtook China for the first time as the biggest destination for greenfield FDI," the report notes.
Green-field investments occur when a parent company or government begins a new venture by constructing new facilities in a country outside of where the firm is headquartered.
The trade review found that intra-Commonwealth exports of goods and services stood at USD 560 billion in 2016 and this trade, as a proportion of global trade, is rising and is now 20 per cent of Commonwealth countries' total trade with the world.
"This underlines the growing significance of Commonwealth markets for many member countries. With world trade growth forecast to rebound in 2017-18, the Commonwealth appears on track to achieve USD 700 billion in intra-Commonwealth trade in goods and services by 2020, while proactive policy measures can trigger even greater gains," the report notes.
Intra-Commonwealth trade is projected to reach USD 700 billion by 2020, driven in large part by India's economic growth.
According to the findings, the "dramatic rise" in the increased prominence of intra-Commonwealth investment is driven by India, a country which also presents enormous potential across economic sectors from the application of digital technologies.
The 2015 'Commonwealth Trade Review' had found that Commonwealth countries, on average, tend to trade around 20 per cent more and generate 10 per cent more investment with each other than with non-member countries.
The 2018 review was undertaken to explore how Commonwealth members, individually and collectively, can strengthen this Commonwealth advantage in two ways: by harnessing new technologies, especially digitisation, to trigger new trade and investment opportunities; and by strengthening certain aspects of their domestic trade governance regime to reduce trade costs further.
"Trade and investment flows among our members are strong and continue to grow. Despite the unexpected contraction in world trade since our 2015 Trade Review, intra-Commonwealth trade in goods and services, and productive greenfield' investment, is growing fast and projected to exceed USD 1 trillion by 2020," said Baroness Patricia Scotland, Commonwealth Secretary-General.
The review will feed into the Commonwealth Business Forum deliberations among business leaders and policy-makers from across the member countries, scheduled in London between April 16-18.
Among the Indian business leaders expected to participate include Rakesh Bharti Mittal, President Designate, Confederation of Indian Industry (CII) and Vice-Chairman, Bharti Enterprises, for a panel on global economic growth; Ajay Piramal, Chairman, Piramal Group, for a panel on business trust; and Ravi Parthasarathy, Chairman, Infrastructure Leasing & Financial Services Limited, for a panel on Smart Cities.
The business forum, alongside parallel Youth, Women's and People's forums, will mark a precursor to the Commonwealth Heads of Government Meeting (CHOGM) in London and Windsor on April 19-20, to be attended by Prime Minister Narendra Modi.
NEW DELHI: India is expected to establish itself as the third largest travel and tourism economy by 2028 in terms of direct and total GDP, a 2018 economic impact report by World Travel & Tourism Council (WTTC) has said.
The WTTC report, released globally on Thursday, also said India will add nearly 10 million jobs in the tourism sector by 2028 and that the total number of jobs dependent directly or indirectly on the travel and tourism industry will increase from 42.9 million in 2018 to 52.3 million in 2028. Calling India the seventh largest travel and tourism economy in the world, Gloria Guevara, president and chief executive of WTTC, said India should be working on improving tourist infrastructure.
In an exclusive email interview to TOI, Guevara said, “The biggest single area of improvement for travel and tourism in India is infrastructure. Tourism is a competitive business in a global context and India’s near neighbours to the east and west have built world-class tourism infrastructure in the form of airports, sea ports, high-speed rail and roads. WTTC has long welcomed the opportunity of the Regional Connectivity Scheme to open up 350 unserved and underserved airports and airstrips.”
Guevara welcomed the government’s ambition to make the country a global cruise destination with the creation of the new cruise port in Mumbai. “There are some extremely proactive steps that have been introduced by the government to increase international visitors. We recognise the introduction of e-visa for 163 countries and the launch of Incredible India 2.0 campaign with major improvement in the marketing and PR strategy,” she said.
The WTTC, however, red flagged the sector’s concerns over the three-level implementation of GST in the hospitality sector and said the government must bring in tax reforms to make India’s tourism sector more competitive with other countries in the region.
Source:- The Times of India
LinkedIn, the popular social networking site for business people and professionals, released a report ranking 25 companies in India that are most preferred by professionals as their workplace. The list that is led by India’s Directi. Mukesh Ambani owned Reliance Industries, country’s largest and most valued firm, stands at 24th on this list. The other Indian companies are Flipkart, One97 Communications, Ola, OYO, and MakeMyTrip. The list of 25 companies was prepared based on proprietary LinkedIn data and billions of actions by over 546 million professionals on the platform. The LinkedIn report suggests that Indian professionals prefer local companies such as Directi, Flipkart and One97 Communications (Paytm) over global leaders such as Google and Amazon in form of their workplace.
Both LinkedIn and its parent firm Microsoft are not included in the list. Amazon has slipped to fourth place after remaining at second spot in the last two consecutive years. India’s Directi, Flipkart and One97 Communications are the top three companies in the list. Alphabet that is Google’s parent company has been listed at seventh rank in the list.
The list compiled by the popular social networking site for business people and professionals provides a data that may help in solving problems and rewriting the rules followed by one’s industry, said Adith Charlie, India Editor, LinkedIn. Home-grown taxi-hailing app Ola stands at 16th place this year from fifth position in 2017.
Meanwhile, a study by job website Indeed has revealed that millennials are not much interested in the country’s agriculture sector or farming related jobs. There is a plunge of 25 percent in the average number of agriculture related job searches each week during CY2017. The reason behind this plunge is poor awareness about the scope of sector, lacking entrepreneurial spirit and job security, the study added. Recently, Nobel Laureate Paul Krugman, had said that for India to grow at the same pace as China, it needs to develop enough number of manufacturing jobs. He also said that India’s growth story could derail due to lack of manufacturing sector jobs.
Source:- Financial Express
NEW DELHI (NewsRise)--India plans to let overseas companies own bigger stakes in defense joint ventures in a renewed push to draw more foreign investment and turn into a global production hub for military hardware.
The world's largest arms importer also plans to encourage greater private sector participation in its defense industry, dominated by state-run companies and plagued by long delays in product development.
The draft Defence Production Policy 2018, unveiled Thursday, has set an ambitious aim of a more than threefold jump in defense industry revenue to 1.7 trillion rupees ($26 billion) by 2025. By then, it expects the defense industry in the South Asian country to rank amongst the top five globally.
"(Foreign Direct Investment) up to 74% under automatic route will be allowed in niche technology areas," according to the draft policy. The defense ministry, which prepared the draft, has sought comments until the end of March. The policy has to be approved by the federal cabinet before it is implemented.
Analysts said India's grand goals are challenging, and can only be achieved if the government has a long-term, dedicated strategy toward fostering a local defense industry with active participation of private companies and replacing its archaic procurement policies.
"India's objectives sound similar to those of South Korea and Turkey which also want to develop their own defense industries. Reality is, there is not room for everybody up there (in the top five)," said Guy Anderson, a London-based defense industry analyst at Jane's by market researcher IHS Markit.
India was the world's largest arms importer in the four years through 2017, making up 12% of globally traded arms, according to the Stockholm International Peace Research Institute, or SIPRI, which tracks global arms sales. "The tensions between India, on the one side, and Pakistan and China, on the other, are fuelling India's growing demand for major weapons, which it remains unable to produce itself," said Siemon Wezeman, senior researcher at SIPRI.
India has over the years purchased billions of dollars of military hardware including fighter jets, warships, aircraft and missiles from its biggest supplier, Russia, as well from the United States, France and Israel. The country has been trying to modernize its military to narrow the gap with its belligerent neighbor, China, as well as long-time rival, Pakistan.
According to the draft policy, the government plans to pursue selling smaller stakes in state-run defense enterprises and engage more actively with the private industry to exploit the opportunities in the defense sector.
Anderson said "India has enormous untapped potential in terms of human capital and capacities". But private sector in the defense industry "is still in its infancy" as state-owned companies still receive most arms deals due to factors such as national security concerns.